* Latest Market Developments *

OVERNIGHT DEVELOPMENTS

There are three features at work in the market place this week: One, the strong U.S. dollar that hit a two-year high against the Euro and a six-year high against the yen. Two, the sharp drop in crude oil prices, due to a glut of oil on the world market. Nymex crude oil prices overnight hit a multi-month low of $88.18 a barrel. And three, the sharp sell-off in the U.S. stock indexes that saw them hit a six-week low Wednesday. The ebola disease scare in the U.S. has contributed to a “risk-off” mentality in the market place late this week.

The European Central Bank was expected to make no changes to its monetary policy at its monthly meeting Thursday. Traders are also awaiting ECB president Mario Draghi’s press conference, for clues on when the ECB might make its next policy move.

There was more dour economic news coming out of the EU Thursday, as the Euro zone producer price index was down 0.1% in August from July and down 1.4% year-on-year. It’s another worrisome clue that problematic deflation could be setting in for the world’s third-largest economy.

The market place awaits Friday’s September U.S. employment report from the Labor Department. This report is arguably the most important economic report of the month. Traders expect the key non-farm payrolls figure to have risen by around 215,000 in September.

The pro-democracy demonstrations in Hong Kong have not abated and reports Thursday said protesters may be ready to block access to government buildings. That would be an escalation of the conflict that could quickly usher in keener risk aversion in the market place. Traders and investors are closely monitoring  this matter. China is celebrating a week-long national holiday this week.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, the ISM New York report on business, and manufacturers’ shipments and orders.

Wyckoff’s Daily Risk Rating: 6.5 (The pro-democracy protesting in Hong Kong has moved a bit closer to the front burner of the market place.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

–Jim Wyckoff

U.S. STOCK INDEXES

S&P 500 December e-mini futures: Prices are near steady in early trading after hitting a six-week low on Wednesday. Bears have downside momentum to begin to suggest at least a near-term top is in place. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at 1,950.00 and then at Wednesday’s high of 1,967.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,933.75 and then at 1,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly weaker in early trading today, after hitting a six-week low on Wednesday. Bulls have faded. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the 4,000.00 and then at 4,025.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Wednesday’s low of 3,965.00 and then at 3,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are slightly higher in early U.S. trading, after hitting a six-week low on Wednesday. Bulls have faded badly to suggest a market top is in place. Buy stops likely reside just above technical resistance at 16,800 and then at 16,850. Sell stops likely reside just below technical support at Wednesday’s low of 16,695 and then at 16,650. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are slightly lower early today and hit a four-week high overnight. Bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 140 1/32 and then at the contract high of 140 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 139 even and then at 138 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 December U.S. T-Notes: Prices are slightly higher in early trading and hit a four-week high overnight. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 125.22.0 and then at 125.30.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.13.5 and then at 125.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The December U.S. dollar index is lower in early trading and seeing some profit taking after hitting a contract and four-year high this week. Bulls still have the solid overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 86.000 and then at the contract high of 86.335. Shorter-term support is seen at the overnight low of 85.600 and then at 85.000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

November Nymex crude oil prices are sharply lower early today and hit an 8.5-month low. Bears are in firm control, to suggest still more downside price pressure to come in the near term. Look for buy stops to reside just above technical resistance at $90.00 and then at the overnight high of $91.00. Look for sell stops just below technical support at the overnight low of $88.18 and then at $87.50. Wyckoff’s Intra-Day Market Rating: 3.5

GRAINS

Markets were narrowly mixed in overnight trading. Traders will closely examine today’s weekly USDA export sales report. Steady rains have halted harvest work in much of the Corn Belt late this week. Markets are near their contract lows and bears remain in full technical command. Besides record corn and soybean crops and a world awash in wheat, the very weak raw commodity sector, overall, is a major bearish weight on the grains, too. The very strong U.S. dollar is another anchor for the grains.